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Thursday, January 12, 2006

Africans should invest on submarine cable, satellite – Expert

AFRICAN entrepreneurs have been urged to invest on sub-marine cable and satellite so as to avail bandwidth competition in the Information and Communications Technologies (ICTs) sector, in the region, says the chief executive, eShekels Limited, Mr. Fola Odufuwa.
According to him, non-expression of interest on satellite or sub-marine cables by African entrepreneurs have influenced the cost of bandwidth to remain upward on the continent and particularly in the West Africa region.
Mr. Odufuwa in a chat with ITREALMS recently after a presentation at the Open Source Initiative for West Africa (OSIWA) organized workshop on ‘Affordable bandwidth for West and Central Africa’ in Sally, Senegal, said that inadequacies of bandwidth in Africa was due to lack of interest by African investors in taking lead by investing on satellite or the sub-marine cable infrastructure.
He noted partly that non-liberalisation of the sector has been an impediment to having sufficient bandwidth, just as lack of competition.
Pointing out that on the continent, there are just two sources of
providing bandwidth supply, namely through the sub-marine cable SAT-3 also known
as from Atlantis to Dakar and the rest are covered by
satellite.
Current situation, he said, is the one that has about six fleets of satellites all over Africa none is owned by an African businessman or woman.
The rate being paid for bandwidth on the continent for now, therefore, is several times above what is obtained in developed economies.
In Africa, Mr. Odufuwa, who heads a technology-based research firm, said, cost of bandwidth is very, very high, while in the developed countries, they pay quite low prices for Internet access.
“So, you find in developed economies or rich countries paying extremely low prices for Internet and poor countries such as found in Africa paying extremely high for bandwidth,” he asserted.
Emphasising that this anomaly is caused by what he described as suppliers power.
“Supplier has a power, and is exhibiting significant market power because there are few of them and there is no competition,” he said.
SAT-3, he cited as an instance, saying its just one and is even in the hands of incumbent operators, which is usually the national carriers.
“Who have no reason beyond social responsibilities for most of them,
who have no commercial reason to maximize the investment,” he
declared.

Mr. Odufuwa also said that by allowing consumer and offering lower prices in order to have high volume of people these incumbent operators could still have some margins or even better margins.
Africa, he pointed out, needs to liberalise the availability of bandwidth very quickly by fibre optic through authorizing and encouraging people who have the wherewithal to invest and install submarine cables.
“SAT-3 cost about $250 million connecting South Africa to Portugal, now you can install the same work with one-third of that price,” he said.Stressing that these are things Africans do not need to go source for donor funding or World Bank before embarking on such a project.

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